JEFFERSON CITY — In an about-face from a month ago, the board that oversees Missouri’s state employee pension system voted Tuesday to jettison some investments in China over the next three years.
Led by appointed state Treasurer Vivek Malek, a Republican newcomer embroiled in a crowded 2024 primary race, the Missouri State Employees’ Retirement System board voted 9-2 to phase out investments in the country worth about $190 million.
Malek, with help from Gov. Mike Parson, managed to reverse a vote from last month when the board rejected his idea, which has become a talking point in Malek’s bid for a full, four-year term.
The difference between now and then: In November, the vote was an unrecorded voice vote, while Tuesday’s was a recorded vote, putting the 11 members on the spot to take a public position.
People are also reading…
The two “no†votes Tuesday came from Gary Findlay, the former executive director of MOSERS, and Senate Minority Leader John Rizzo, who called Malek’s push a political ploy to win votes in next year’s election.
“This does nothing. It does nothing to stand strong against China,†said Rizzo, D-Independence.
Rizzo said MOSERS investment managers have not called on the board to take action on the issue. He added the board’s actions show instability, which could hurt the pension system.
Rizzo slammed Malek for not accepting the vote from four weeks ago, saying the Republican is fighting a culture war by using the state’s 140,000 retirees and current workers.
“You’re trying to do something that can sound big but doesn’t hurt the pension fund,†Rizzo said.
He said pension fund managers could turn around and use money currently invested in China and invest in private companies that invest in China, such as Apple or General Motors.
“I respectfully disagree with Senator Rizzo,†Malek said before the votes were cast.
Malek said China investments have not performed well in the past 15 years. In addition, he said the country is a threat to national security, making it a risky investment.
“This is not all made-up stuff,†Malek said.
Malek, an attorney from Wildwood who is the first person of color to serve in statewide office, enlisted help from Parson, who appointed him to the post in January.
Parson last week called on the pension system to take direct action and hold a recorded vote to disinvest in China, rather than wait for lawmakers to wade into the issue during their upcoming legislative session.
Lawmakers return to action Jan. 3 with at least one member pursuing legislation that would prohibit all public pensions from investing in companies controlled by the People’s Republic of China or the Chinese Communist Party.
The legislation, sponsored by Rep. Dirk Deaton, R-Noel, also sets forth a divestment plan for any affected investment but does so in a way as to limit any losses for the pension system or taxpayers.
Deaton, a member of the MOSERS board, voted “yes†on Tuesday, joining other Republican members supporting the change.
China has become an issue before the Missouri Legislature in recent years with lawmakers seeking to ban foreign ownership of farmland. The Chinese spy balloon that floated over Missouri before being shot down in the Atlantic Ocean spurred action on legislation in the House, but the farmland measure did not advance in the Senate.
The move by MOSERS is not expected to have a significant impact on the system’s nearly $9 billion portfolio, which is used to support monthly pension payments to retirees.
Rep. Don Mayhew, R-Crocker, said his decision to vote in favor of divestment was not based on politics, but on what makes financial sense for the pension system.
“I personally don’t care for China’s politics. However, I was appointed to this board not to bring my political and personal views into the decision making process,†Mayhew said. “My vote is only in the interest of what is, in my opinion, best for the membership.â€